ChiNext stocks drop on second trading day

The ChiNext, China’s Nasdaq-style stock market saw 20 of its 28 stocks down by the 10% daily trading limit on Monday its second day of trading, the Wall Street Journal reported. This followed an opening on Friday when stocks rose by as much as 210%, a day when different trading rules applied. Analysts had expected profit taking on Monday, but they cautioned that liquidity in the market may delay a broader price correction. Two stocks finished higher on Monday. Sichuan Jifeng Agricultural Machinery Chain reached the maximum 10% to RMB38.84 (US$5.69) and Anhui Anke Biotechnology rose 3.5% to RMB51.85 (US$7.60). The Shenzhen Stock Exchange, which hosts ChiNext, ses price thresholds that may trigger temporary trading halts on the initial day of trading for any ChiNext stock. However, in subsequent sessions, it applies the same 10% daily trading limit on the start up market as it use for stocks on its main board. Under those rules, a stock that has fallen or risen by 10% is allowed to continue trading but not to extend its drops or gains beyond the 10%.